Alpha, beta, gaga

In a way, a debate over alpha and beta separation – a debate that happened in equity fund management 20 years ago – is indicative of the arrival of currency as genuine source of return. James Binny, head of Index Research, RBS Global Banking and Markets

When I started as a currency fund manager 19 years ago, the concept of actively managing currencies was regarded as a little weird – why bother when there was an equity market? The fact that my team used quantitative techniques pigeonholed us into our own strange niche. Now quantitative techniques and filters are used to a greater or lesser extent by most fund managers. In addition currency management is, or is close to, a mainstream investment mandate for institutional investors.

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